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Board Paper of Class 12-Commerce 2013 Accountancy (SET 1) - Solutions

General Instructions
1) This question paper contains two sections: A and B.
2) Section A is compulsory.

Section A
i. This section consists of 2 compulsory questions.
ii. Question No. 1 carries 20 marks.
iii. Question No. 2 carries 10 marks.
iv. This whole section is of 30 marks in total.

Section B
i. This section consists of 8 questions.
ii. Attempt any 5 questions from question nos. 3 to 10 carrying 14 marks each.
iv. This whole section is of 70 marks in total.

  • Question 1
    Answer briefly each of the following questions :                                 [10 × 2] = [20 Marks]  
    (i) Give two differences between Net Profit and Cash from Operations.
    (ii) When does Loss on Issue of Debentures arise ?
    (iii) Give two differences between Authorized Capital and Issued Capital.
    (iv) Why is the word memorandum affixed to the Memorandum Joint Venture Account ?
    (v) How is double entry completed in the General Ledger when ledgers are kept under the
    Self Balancing System ?
    (vi) What is the accounting treatment of Employees' Provident Fund appearing in the
    Balance Sheet of a partnership firm at the time of its dissolution ?
    (vii) Give the formula for computing Price Earning Ratio.
    (viii) Give two differences between Reserve Capital and Capital Reserve.  
    (ix) How will the firm show the amount payable to the retiring partner, if it is not in a
    position to immediately pay the amount due to him on his retirement?
    (x) What accounting steps are taken by a partnership firm when a new partner is unable to
    bring the business guaranteed by him ?
    VIEW SOLUTION
  • Question 2
    Alex, John and Sam are partners in a firm. Their capital accounts on 1st April, 2011, stood at Rs 1,00,000, Rs 80,000 and Rs 60,000 respectively. [10 Marks]
    Each partner withdrew Rs 5,000 during the financial year 2011-12.
    As per the provisions of their partnership deed :
     
    (a) John was entitled to a salary of Rs 1,000 per month.  
    (b) Interest on capital was to be allowed @ 10% per annum.  
    (c) Interest on drawings was to be charged @ 4% per annum.  
    (d) Profits and losses were to be shared in the ratio of their capitals.  
    The net profit of Rs 75,000 for the year ended 31st March, 2012, was divided equally amongst the partners without providing for the terms of the deed.
    You are required to pass a Single Adjusting Journal Entry to rectify the error.
    (Show the working clearly).
     
    VIEW SOLUTION
  • Question 3
    Reliable Ltd. was registered with an authorised capital of Rs 20,00,000 in Rs 10 per equity share. It invited applications for issuing 1,00,000 equity shares at a premium of Rs 2 per share. The amount was payable as follows:                 [14 Marks]
     
    On application Rs 4 per share (including premium)
    On allotment Rs 3 per share
    Balance on 1st and Final Call  

    Applications were received for 1,30,000 shares. Applications for 10,000 shares were rejected and the application money received on them was refunded. Pro-rata allotment was made to the remaining applications. Amount overpaid on these applications was adjusted towards the amount due on allotment. Sameer, who had applied for 1,200 shares, failed to pay the allotment and call money. The company forfeited his shares, out of which 800 shares were reissued to Sanjay at Rs 9 per share fully paid.

    You are required to :
    (i) Pass the Journal Entries in the books of the company through Calls in Arrears Account.
    (ii) Prepare the Share Allotment Account.
    VIEW SOLUTION
  • Question 4
    Arthur Ltd. reported a profit of Rs 90,000 for the year ended March 31, 2012, after considering the following:       [14 Marks]
     
        Rs
    (a) Tax provided during the year 3,000
    (b) Amortisation of goodwill 12,000
    (c) Profit on sale of land 5,000
    (d) Writing off preliminary expenses 2,000
    (e) Machinery costing Rs 40,000 (accumulated depreciation thereon being Rs 18,000) was sold during the year at a loss of Rs 17,000
     
    Extracts of its Balance Sheets at the beginning and at the end of the year are given below:
     
      01.04.2011 31.03.2012
    Account Receivable 16,000 20,000
    Stock 15,000 12,000
    Cash at Bank 10,000 8,000
    Account Payable 11,000 9,000
    Expenses Payable 5,000 6,000
    Provision for Taxation 6,000 4,000
    Investments  (short-term) 2,000 5,000
    Plant and Machinery (net value) 1,30,000 94,000
    Proposed Dividend 10,000 12,000
     
    You are required to calculate Cash from Operating Activities as per Accounting Standard-3. (Show your working clearly.) VIEW SOLUTION
  • Question 5
    Following is the Balance Sheet of Ravi and Prakash as on 31st March, 2012 :                [14 Marks]
     
    Balance Sheet
    as on 31st March, 2012
    Liabilities Amount
    (Rs)
    Assets Amount
    (Rs)
    Sundry Creditors 60,000 Cash 25,000
    Ravi’s Loan 15,000 Debtors 42,000  
    General Reserve 15,000
     Less: Prov. of D/D
    (6,000) 36,000
    Invest. Fluctuation Fund 2,000 Stock 12,000
    Ravi’s Capital 30,000 Investments 18,000
    Prakash’s Capital 10,000 Plant and Machinery 41,000
      1,32,000   1,32,000
           

    The firm was dissolved on 31st March, 2012, on the following terms:
    (a) Ravi took over stock at Rs 8,000.
    (b) Creditors payable after two months were paid immediately at a discount of 6% per annum.
    (c) Debtors realized Rs 35,000.
    (d) Plant and Machinery and Investments realized Rs 60,000.
    (e) An old computer completely written off was taken over by Prakash at Rs 1,200.
    (f) Realization expenses of Rs 2,000 were paid by Ravi.

    You are required to prepare:
    (i) Realisation Account.
    (ii) Partners’ Capital Account.
    (iii) Cash Account.
    VIEW SOLUTION
  • Question 6
    Neha and Tara are partners in a firm sharing profits and losses in the ratio of 3 : 2. Their Balance Sheet on 31st March, 2012, stood as follow:    [14 Marks]
     
    Balance Sheet
    as on 31st March, 2012
    Liabilities Amount (Rs) Assets Amount (Rs)
    Capital Accounts:   Plant & Machinery 12,000
    Neha
    8,000   Land and Building 14,000
    Tara
    10,000 18,000
    Debtors
    19,000  
    General Reserve 12,000
    Less: Prov. for D/D
    (4,000) 15,000
    Workmen’s Compensation Fund 5,000 Stock 6,000
    Creditors 15,000 Cash 3,000
      50,000   50,000
           

    They agreed to admit Prachi into partnership for 1/5th share of profits on 1st April, 2012, on the following terms:
    (a) All debtors to be considered as good and therefore, the provision for doubtful debts to be written back.
    (b) Value of land and building to be increased to Rs 18,000.
    (c) Value of plant and machinery to be reduced by Rs 2,000.
    (d) The liability against Workmen’s Compensation Fund is determined at Rs 2,000 which is to be paid later in the year.
    (e) Prachi to bring in her share of Goodwill of Rs 10,000 in cash.
    (f) She will further bring in cash so as to make her capital equal to 20% of the total capital of the new firm. (Show your working clearly)
    You are required to prepare:
    (i) Revaluation Account
    (ii) Partners' Capital Accounts.
    (iii) Balance Sheet of the reconstituted firm.
    VIEW SOLUTION
  • Question 7
    (a) The following information is available from the books of Greg Foods Limited:           [14 Marks]
        Rs
    Equity Share Capital
    1,00,000
    8% Preference Share Capital
    40,000
    Reserves and Surplus
    60,000
    Investments
    30,000
    Current Assets
    70,000
    Proprietary Ratio is 0.8 : 1.
     
    Assuming that there are no fictitious assets, calculate the value of the fixed assets of the company.
     
    (b) The following figures have been extracted from the records of Allen Cosmetics Limited:
        Rs
    Cost of goods sold
    4,00,000
    Current liabilities
    90,000
    Profit margin is equal to 20% on selling price.
    Working Capital Turnover Ratio is equal to 10 times.
    Determine the value of the Current Assets of the company
     
    (c) The following details are available from the books of Simon Gadgets Limited:
        Rs
    Sales
    8,00,000
    Opening stock
    40,000
    Closing stock
    50,000
    Gross Profit Ratio is 20%
     
    Calculate the Stock Turnover Ratio of the company (up to two decimal places).
     
    (d) The following data is available from the records of Johnson and Company Limited:
     
    Particulars   Amount
      (Rs)
     Stock
     Sundry debtors
     Bills receivable
     Advance paid
     Cash in hand
     Sundry creditors
     Bills payable
     Bank overdraft
     Reserves
     10% Preference Share Capital
     Equity Share Capital
     Net profit after tax
    50,000
    40,000
    10,000
    4,000
    30,000
    40,000
    60,000
    4,000
    70,000
    5,00,000
    7,00,000
    1,40,000

    Calculate the following (up to two decimal places) :
    (i) Current Ratio.
    (ii) Quick Ratio.
    (iii) Return on Equity Shareholders’ fund.
    VIEW SOLUTION
  • Question 8
    Andrew and Roger entered into a joint venture and agreed to share profits and losses in the ratio of 3 : 2 respectively.
    Andrew purchased goods worth Rs 1,00,000 in cash. He spent Rs 10,000 on freight and insurance and dispatched
    the goods to Roger. Roger got the goods released from the transport company and paid Rs 5,000 on carriage up to the
    warehouse and Rs 10,000 as rent of the warehouse. Roger sold 80% of the goods for Rs 3,00,000. He was entitled
    to receive commission @6% of the sales. He later informed Andew that the remaining goods were destroyed by fire.
    Since the goods in the warehouse were not insured, Roger agreed to bear the entire loss which was valued at
    original cost plus proportionate expenses. The accounts were settled between the co-ventures by means of a bank draft.
    You are required to prepare in the books of Andrew:
    (i) Joint Venture Account.
    (ii) Roger’s Account.                                                                                                             [14 Marks]
    VIEW SOLUTION
  • Question 9
    Sim, Tim and Jim are partners sharing profits and losses equally. Their Balance Sheet as on 31st March, 2012, stood as follows:      [14 Marks]
     
    Balance Sheet
    Particulars Amount (Rs)
    I.  Liability  
     Sim’s Capital
    2,50,000
     Tim’s Capital
    2,00,000
     Jim’s Capital
    1,50,000
     Creditors
    1,40,000
     General Reserve
    60,000
      8,00,000
       
    II.  Assets  
     Building
    2,00,000
     Plant and Machinery
    1,00,000
     Patent and Copyright
    1,50,000
     Stock
    1,25,000
     Debtors
    1,50,000
     Bank
    75,000
      8,00,000
       

    From April 1, 2012, the partners decide to share profits and losses in the ratio 3 : 2 : 1 and for that purpose the following revised value of assets were agreed upon:

    Building Rs 2,75,000; Plant and Machinery Rs 90,000; Patents and Copyrights Rs 1,32,500; Stock Rs 2,00,000; Prepaid Insurance Rs 5,000 and Debtors Rs 1,42,500.
    Goodwill of the firm was valued at Rs 60,000.

    Partners decide not to disturb the reserves. Also they decide not to record the revised value of assets in the books of Accounts.

    You are required to prepare:
    (i) Partners’ Capital Accounts.
    (ii) Balance Sheet of the re-constituted firm.

    (Show your workings clearly.) VIEW SOLUTION
  • Question 10
    Peter’s books show the following details for the month of April, 2012:           [14 Marks]
     
      Debit
    (Rs)
    Credit
    (Rs)
    Creditors Balance (01.04.2012) 4,000 16,000
    Creditors Balance (30.04.2012) 10,000 ?
     
     
    Particulars Amount (Rs) Particulars Amount (Rs)
    Purchase (including cash Rs 4,000) 1,04,000 Bills payable renewed 1,000
    Cash paid to creditors 30,000 Discount received 4,000
    Bills Receivable endorsed 20,000 Returns outward 12,000
    Bills Receivable endorsed
    dishonoured
    4,000 Bills payable accepted
    (excluding bills renewed)
    30,000
    Transfer from debtors ledger to
    creditors ledger
    5,000 Bills payable matured 5,000

    You are required to prepare General Ledger Adjustment Account in the Creditors’ Ledger. VIEW SOLUTION
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